The ECB, which kept interest rates steady, had been expected to lower its inflation and growth forecasts, giving Draghi room to cut rates and support recession-hit economies in the coming months.

The bank did lower its growth forecast for the currency bloc for 2013, but Draghi said he expects economic activity to gradually recover, given firming global demand. He also said inflation expectations "remain firmly anchored," in line with the ECB's aim of maintaining inflation rates below but close to 2 per cent over the medium term. That should allow the ECB's monetary policy stance to stay loose.

People have also underestimated the political commitment to the euro at their own cost, the ECB chief added.

"Draghi played cheerleader, transmitting a bit of hope to the euro FX rate, but leaving no room for an added ECB boost to the business cycle," said Dan Dorrow, head of research at FX broker Faros Trading, in Stamford, Connecticut.

But he added that despite the euro's appreciation, he viewed Thursday's ECB comments, including the growth and inflation forecasts, as negative for the euro zone's shared currency in the medium term.

"Growth differentials will increasingly matter for FX rates in a global environment with receding tail risks," said Dorrow. "The ECB is the most behind the curve among G4 central banks (US, UK, euro zone, and Japan) in terms of providing policy support for the business cycle - despite the fact that the euro zone's growth outlook is the worst among the G4 economies."

The euro shot up 1.1 per cent for the day to $US1.3107. The session peak of $US1.3118 marked a five-day high. Some US$US5.2 billion in euros changed hands, using Reuters Dealing.

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Healthy demand at a Spanish debt auction also eased some investors' concerns about the euro zone. Spain sold 5 billion euros of bonds, hitting the top end of its targeted amount at reduced borrowing costs despite political uncertainty in Italy.

Marc Principato, director of SMB Forex Trading And Education in New York, said the single currency, after breaching minor resistance at $US1.3050, faced significant challenges between $US1.3250 and $US1.3300 in the coming week.

Most analysts say that even if borrowing costs for highly indebted euro-zone countries like Spain and Italy do not rise, on a more fundamental basis, the struggling euro-zone economy will need a more accommodative monetary policy stance along with a weaker currency to boost growth.

Against the yen, the euro surged nearly 2.1 per cent to 124.57 yen, its highest in more than a week. It was last at 124.32 yen, up 1.9 per cent, its best one-day performance since February 11.